C.R.E.A.M. Finance’s Iron Bank and PleasrDAO execute $3.5M loan with NFTs as collateral

Michelle Lim

3 years ago

C.R.E.A.M. Finance’s Iron Bank today announced that it has facilitated a US$3.5 million loan with cypto art collective PleasrDAO using high-value non-fungible tokens as collateral, according to an announcement shared with Forkast.News.

Fast facts

Taipei-based C.R.E.A.M. Finance, part of the Yearn finance ecosystem, is a decentralized lending protocol for individuals, institutions and protocols to access financial services. PleasrDAO was formed earlier this year by a group of investors to buy digital artist Pplpleasr’s Uniswap V3 NFT. PleasrDAO’s members include many prominent individuals in the decentralized finance space, such as Mechanism Capital’s Andrew Kang, Compound’s Robert Leshner, Nansen’s Alex Svanevik and Aave’s Stani Kulechov.

Decentralized autonomous organizations are emerging as a popular way to manage tokenized assets and facilitate governance within decentralized entities. DeFi lending protocols usually involve cryptocurrencies, but the loan sees the two DAOs using four high-end NFTs as collateral — “Snowden,” “Tor,” “x*y=k” and “Apes,” collectively valued at more than US$8 million as of the time of purchase. The collateralized NFTs will be held by the Iron Bank in a separate “multisig” vault.

“The NFT market can now access comparable lending conditions offered to high-end art collectors by traditional institutions like Bank of America; typically set at 50% of appraised collateral value,” the announcement said.

“The Iron Bank is breaking new ground in DeFi, NFT, and DAOs by welcoming the first-ever DAO-to-DAO loan as well as the first high-end NFT-collateralized lending transaction,” said Leo Cheng, co-founder and project lead at C.R.E.A.M. Finance. “This is just the beginning as we continue to drive innovation in DeFi credit services.”

“There is currently an underexplored human-to-human element of DeFi that is beginning to develop rapidly. Human identity and credibility will soon be a multifaceted concept tightly coupled with on-chain history, your record of achievement, behavior and shortfalls — all engraved in the ledger,” said Jamis Johnson, chief pleasing officer at PleasrDAO. “The Iron Bank may have its roots in granting credit to trusted, highly capitalized protocols, but this landscape is now extending to include DAOs and potentially individuals, all collateralized by liquid assets, illiquid NFTs, and even social standing. PleasrDAO could not be more pleased to be the first DAO-to-DAO, NFT-backed line of credit from the Iron Bank and we feel strongly this is only the beginning of what’s possible.”